1. January retail sales report to look frosty
If Americans are putting a freeze on their wallets, don’t look for signs of a warm-up in Wednesday’s report of January retail sales. Economist Nigel Gault is looking for a drop of 0.4 percent, the same glum result as a month earlier. “With payroll employment edging downward in January, consumer spending continues to lose momentum,” said Gault, of Global Insight in Lexington, Mass. Sales will remain flat through the first half of 2008, he said, “but then they will pick up sharply in the second half of the year as the tax rebate checks start arriving in the mail.”
2. Boeing sales help narrow trade deficit
The sagging dollar may get a slight boost on Thursday, with figures for the December trade deficit. Analysts expect the shortfall to slip to about $61 billion, from $63.1 billion a month earlier. While high oil prices hurt, economists cite one positive factor: huge year-end sales by Chicago-based jetliner giant Boeing Co.
3. Fed chief to appear before Congress
On Thursday, Federal Reserve Chairman Ben Bernanke appears before members of Congress. Although a credit crunch remains a problem, there has been a modest pickup in home refinancing, said Chicago economist Carl Tannenbaum. He doesn’t look for the Fed to cut rates before the next meeting, slated for March 18. “There may be some nervous moments, but it will take a lot for the Fed to move again between meetings, as took place Jan. 22,” he said. “Members of the central bank received criticism from various quarters, and they don’t want to appear anxious or desperate.”
4. Gas below $3 a gallon on horizon
The watch is on for gasoline prices to slip below $3 a gallon, an event that has become commonplace for consumers in much of the country, but not here. Prices in general have fallen by more than 4 percent in most locations, as a barrel of oil, which topped $100 in late December, has tumbled nearer to $90. Analysts report that petroleum and gasoline stocks in storage remain brimful, as oil companies confront slowing demand.
5. Economic volatility ‘the norm’ in 2008
While some stock market analysts have been quick to declare the economy is in recession, investment manager Douglas Nardi holds to a view that it remains a 50-50 likelihood that the slowdown won’t result in economic shrinkage. But Nardi, of Legg Mason Investments, said it will take patience to make money from stocks this year. Because of the uncertainty created by the coming elections, he is telling clients that “volatility will be the norm, and returns look to be more back-ended” toward the closing months of 2008.
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wsluis@tribune.com
